Remember that "10" on that original diagram has a specific meaning: offering 10 year bonds and only 10 year bonds. "B" on that diagram means offering both 5 and 10. So S is not prevented from offering 10 year bonds, but instead prevented from offering ONLY 10 year bonds. S could offer only 5 year, or both; it can never offer just 10.
The reason why that's the case is outlined by Jeremy earlier in the thread:
Jeremy Press wrote: ↑Fri Aug 28, 2020 3:49 pm
Those are quite tricky, so you're definitely getting to the heart of the hardest part of this game!
Let's say, for the second rule, that S does not offer both types of bonds. That means that V cannot offer 5-year bonds (and cannot offer both), and must offer 10-year bonds alone. That fills out the diagram (according to Jon's original sketch) like so:
Screen Shot 2020-08-28 at 3.45.29 PM.png
Since S and V now cannot offer both types, and H/L can never offer both types, there are only two remaining companies that can offer both types: R and G.
Moving on to the third rule, the contrapositive begins from R offering 5-year bonds (but not 10-year and not both), which means L must not offer 10-year bonds, and must therefore offer 5-year bonds. Since L and H cannot offer the same type, H now has to offer 10-year bonds, diagrammed per below:
Screen Shot 2020-08-28 at 3.45.36 PM.png
The S inference is a little head-spinning, admittedly. But, think about what would happen if S offered only 10-year bonds. That would mean V would have to offer both types, which would trigger the second rule (V offering 5-year) and force S to offer both types. So, S has to offer both types!
Let us know if that clears it up!